Protective Put Strategy Explained

Basics of Long Puts

Learn about long puts, the building blocks of the protective put strategy.

What is a Put Option?

A put option is one of the two types of options, with the other being call options. When an investor buys a put option, they have the right to sell the security (such as a stock) that's underlying the option at its strike price, all the way until the option's expiration.

Options FAQ: Where can investors find information on corporate actions?

When an adjustment is warranted, OCC (The Options Clearing Corporation) will post all the relevant details on their website, www.theocc.com.

Options FAQ: How do interest rates impact options?

Interest rates play a crucial role in options pricing, primarily through the risk-free rate, a key factor in models like Black-Scholes. But how exactly do rising or falling interest rates affect call and put options?

Options FAQ: Are there exercise restrictions when there is a corporate action?

When corporate actions occur, many investors wonder whether there will be any exercise restrictions for their options.